Latest housing figures show encouraging progress, but delivery remains the challenge
The Property Council of Australia’s South Australian Division says Adelaide’s latest Office Market Report shows the city’s office market continues to evolve, with businesses increasingly choosing higher quality workplaces while older commercial buildings face growing challenges.
Overall CBD office vacancy increased from 15.5 per cent to 16.3 per cent over the six months to July 2026, largely driven by negative tenant demand. Importantly, almost all of this was concentrated in C and D Grade buildings. C Grade office recorded 15,390 square metres of negative absorption and saw vacancy rise from 12.1 per cent to 19.1 per cent. Despite weaker tenant demand in C and D Grade buildings, the results show Adelaide’ s continued strength in high-quality office stock, with both A Grade and B Grade buildings recording improved vacancy rates over the period, with A Grade vacancy decreasing to 16.4 per cent and B Grade falling to 15.0 per cent, both with positive net absorption.
Property Council Executive Director Bruce Djite said the results point to an office market that continues to evolve rather than decline. “The headline vacancy figure only tells part of the story.”
Mr Djite said. “Businesses are continuing to invest in quality workplaces, with both A Grade and B Grade buildings recording positive tenant demand over the past six months. We are seeing a continued flight to quality, as occupiers consolidate into newer, more efficient and better-performing buildings.”
Mr. Djite also said that the growing challenge for Adelaide is ensuring older commercial buildings don’t become a drag on the vitality of the CBD. “Vacant buildings don’t just affect landlords. They reduce foot traffic, impact surrounding businesses and ultimately make the city centre less vibrant. The conversation shouldn’t stop at vacancy rates. It needs to shift towards how we activate these buildings, support investment and keep Adelaide’s CBD vibrant.”
Mr Djite said this presented an opportunity for governments and industry to think more broadly about how underutilised commercial space can support Adelaide’s economic and social objectives. “Programs like Renew Adelaide have demonstrated what’s possible when small businesses and startups are matched with vacant and underutilised spaces. These initiatives help keep our city centre activated and safer while longer-term investment opportunities emerge.”
“Alongside building refurbishments and planning reforms, initiatives that help activate older commercial buildings should form part of a broader strategy to ensure our CBD remains an attractive place to work, live and stay.” Mr Djite said Adelaide remained comparatively well positioned from a national perspective, with office vacancy sitting around the Australian average with a relatively modest future office supply pipeline compared with larger eastern states markets.
